NEC Cutting 20,000 Jobs

Japanese electronics giant NEC has announced it is cutting some 20,000 jobs and pulling out of some businesses as the economy hits the company's bottom line.

Japanese electronics giant NEC has announced it plans to lay off some 20,000 workers, withdraw from some businesses, and shut down factories as a result of the poor global economic climate. About 9,500 of the layoffs will come come from staff in Japan, about 450 from early retirement, and another 9,000 will come from NEC’s international operations. The company has not announced what operations and businesses it plans to shut down, but has promised its shareholders “substantial reform” at NEC Electronics, the company’s chip fabrication division.

NEC recorded a record loss of of ¥131 billion (about $1.5 billion USD) during its third fiscal quarter of 2008, on revenue of ¥948 billion (about $10.5 billion USD). The company is now projecting a net less of ¥290 billion ($3.2 billion USB) for the 2008 fiscal year due to lower sales, restructuring costs, and write-downs on existing investments. The stronger Japanese yen has also impacted NEC’s profits from overseas operations. Overall, the company expects sales for the 2008 fiscal year to be about ¥4.2 trillion (about $47 billion USD), which would be almost a 10 percent drop from its 2007 fiscal year.